Barbour ABI data shows drop in housebuilding contracts awarded
May’s figure is not thought to be a concern and strong performance expected throughout 2015.
New data released by Barbour ABI has shown that the number of contracts awarded for new build residential projects decreased in May.
Barbour ABI is one of the chosen providers of construction data for the Office for National Statistics (ONS) and the Government, and has a reputation for being a leading provider of construction intelligence services.
This is done through Barbour’s leading team of specialists and lead economist, therefore providing the industry with valuable insight about trends and market conditions throughout the construction industry.
Today’s figures can be explained by uncertainty created before the General Election, as the level of contracts awarded decreased from being just shy of 12,000 in both March and April, to 8,175 units in May.
At its lowest level since November 2014, the number of contracts awarded for new build residential units is nearly half of the level experienced in January 2015.
However, now that the General Election has been decided and the result has given power to a Government that has a clear majority, the level of uncertainty will be markedly lower than experienced in May, and certainly lower than would be expected with a Coalition Government in power, which meant decisions in policy could be vetoed much easier.
In addition to this, the pattern of the number of contracts awarded for new build residential units has been strong so far in 2015, with the comparative figures for the first four months of this year showing a 32% rise from the corresponding months of 2014.
Indeed, in the first four months of 2014, the number of contracts awarded totalled 33,757, but for January, February, March and April of this year, that number is up to 49,707.
This positive message is echoed by Michael Dall, Barbour ABI’s lead economist, who explained why the Election uncertainty would have contributed to this level, and now it is out of the way, the future looks positive.
He said: “With much uncertainty looming around the General Election last month and a hung Parliament looking like the probable outcome, it seems likely that investors and house builders decided to wait for the outcome of the Election before coming to a decision on significant housebuilding projects.
“With the Election now in the distant past, and the expansion of initiatives to support first-time buyers, I expect house building to bounce back in June and have a strong second half of the year.”
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